US industry output steady as manufacturing dips slightly

CNBC's Rick Santelli reports last month's production number stayed the same, but utilization rates came in a bit light at 77.6.

Output at U.S. factories declined slightly in July, reflecting a drop in auto production. The decline was expected to be temporary given the banner sales year automakers are having.

The Federal Reserve says manufacturing output edged down 0.1 percent in July compared with June. It was the first drop since declines in March and April.

Ty Wright | Bloomberg | Getty Images

Workers use grinders to smooth down the welded joints on railroad suspension parts at the Columbus Castings finishing area in Columbus, Ohio, U.S.

July's weakness reflected a 1.7 percent drop in production of motor vehicles and parts. That decline should be reversed in coming months as automakers ramp up production for the new model year.

Overall industrial production, which includes factories, mines and utilities, was flat in July after a 0.2 percent rise in June. A sharp 2.1 percent surge in mining was offset by a 2.1 percent drop in utility output.